Cramer's Rubric for Picking Winning Stocks
Markets on edge over higher raw material costs, Cramer said Monday, so investors need to look for companies with pricing power and control over their expenses.
Take Globe Specialty Metals , for example. The New York City-based company produces silicon metal and silicon-based alloys. Silicon metals are key inputs for a host of end markets that continue to gain strength, like chemical companies and steel makers. Globe is the largest silicon producer in the U.S. and a major contender on the international front. The company is able to operate as an oligopoly and as a result, benefits from great pricing power.
Globe not only has a huge share of markets around the world, it operates in an industry that has huge barriers to entry. It takes up to five years to build a new silicon metals plant. New facilities also need a long-term supply of electricity, as well as quartz, coal and wood. Globe benefits from leasing rights to two quartzite mines and owns a forest in Brazil. In turn, it has a lot of control over its expenses.
Globe's stock has rallied 166 percent since Cramer first recommended it in Dec. 2009 at $8.49. Cramer thinks this company has room to run, though. To learn more about its future prospects, Cramer spoke with CEO Jeff Bradley. Watch the video to see the full conversation.
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